© Copyright Acquisition International 2025 - All Rights Reserved.

Article Image - British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Posted 23rd March 2015

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco's 50% interest in two joint venture portfo

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

British Land Exchanges £733 Million of Joint Venture Properties With Tesco
Image

British Land Exchanges £733 Million of Joint Venture Properties With Tesco

British Land announces it has completed a £733 million property exchange transaction with Tesco. Under the terms of the transaction, British Land has sold its 50% interest in a joint venture portfolio of 21 stand-alone foodstores to Tesco and acquired Tesco’s 50% interest in two joint venture portfolios predominately comprising Tesco-anchored shopping centres and retail parks.
The transaction is in line with our strategy to evolve our retail portfolio. It further reduces our foodstore weighting and increases our exposure to multi-let retail parks and shopping centres. Our full ownership of these assets will provide significant potential to add further value through asset management and development.

Charles Maudsley, Head of Retail & Leisure, British Land, said: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio. We see significant opportunity to add value and drive returns through asset management and development.”

Key transaction terms

Sale of 50% stake in the Tesco Aqua Limited Partnership (“Aqua”) comprising 21 stand-alone foodstores; portfolio value £352 million (50% share); weighted average lease length of 13.3 years; NIY 4.8%
Acquisition of 50% stakes in Tesco BL Holdings Limited (“TBLH”) and The Tesco British Land Property Partnership (“TBLPP”) comprising 3 retail parks and 3 shopping centres, all anchored by Tesco stores, and 3 stand-alone foodstores; combined portfolio value £381 million (50% share); weighted average lease length of 11.4 years; topped up NIY 5.2%
British Land will make a net cash payment of £96 million to Tesco reflecting the difference in net asset value (including mark to market on debt) for Aqua (£81 million) and the combined TBLH and TBLPP joint ventures (£177 million).
In line with strategy to evolve the Retail portfolio

Stand-alone foodstore weighting reduced from 10% of portfolio to 8%
Increases focus on multi-let assets; number of stand-alone foodstores reduced from 79 to 58
Reduces the number of British Land joint ventures by 3 and the number of assets held in joint ventures by 30
Opportunity to drive returns through asset management and development

Taking full ownership of 660,000 sq ft of retail parks and 730,000 sq ft of shopping centres
Potential to enhance returns through asset management notably at Serpentine Green, Peterborough, Beaumont Leys, Leicester and the Kingston Centre, Milton Keynes
Asset swaps in line with valuation and accretive to earnings

Property asset swaps in line with latest reported valuations
Transaction accretive to earnings
Group weighted average interest rate reduced by 15 basis points

Financial effects

Overall, the transaction is accretive to earnings in 2016 reflecting a £2 million increase in net rent and an £8 million reduction in net interest.

The assets acquired within the TBLH and TBLPP joint ventures generate annual accounting net rental income of £20 million. The assets sold within the Aqua joint venture generate £18 million.

The acquired debt held within the TBLH and TBLPP joint ventures currently bears interest of £5 million per annum. The Aqua disposal saves £14 million of interest per annum and including the £96m of net cash payable to Tesco the interest saving is £8m per annum. The net cash payable will be funded from existing resources.

The Group’s proportionally consolidated weighted average interest rate is reduced by 15 basis points. The proportionately consolidated weighted average debt maturity is unchanged at 8.9 years. The transaction increases LTV by 0.4%.

Net asset value per share is reduced by 3 pence per share principally due to the impact of mark to market on the debt.

 

Categories: Finance, M&A


You Might Also Like
Read Full PostRead - Eye Icon
Apex Insurance Services
Strategy
13/04/2015Apex Insurance Services

Established in 1957, Apex Insurance Services are a local Insurance Broker for local people, with traditional broking values. We spoke to them about how they offer a fast, reliable face-to-face personal service.

Read Full PostRead - Eye Icon
A Most Effective Way to Finance Working Capital
Finance
13/02/2024A Most Effective Way to Finance Working Capital

With a portfolio of more than 15,000 happy customers relying on it to aid in the optimisation of their working capital and the reduction of risk to their supply chains, eFactor Network SAPI de CV boasts a state-of-the-art financing platform that improves overa

Read Full PostRead - Eye Icon
Small Business Struggles
Finance
13/08/2015Small Business Struggles

The British Business Bank is regulator of a scheme that ensures small businesses are referred to relevant alternative finance providers in the event of being turned down for bank funding. But what's taking so long?

Read Full PostRead - Eye Icon
Germany Energy & Resources Deal of the Year for the NGIM Holding Acquisition of Solarion AG Transact
M&A
08/06/2016Germany Energy & Resources Deal of the Year for the NGIM Holding Acquisition of Solarion AG Transact

Established in 1982, NGIM Holding is an Istanbul based company offering solutions in the areas of construction, chemistry, technology and energy. The company’s CEO Can Nuhoğlu reveals more about the company and the acquisition of Solarion AG.

Read Full PostRead - Eye Icon
Tesco Mobile Partners with Crisis to Bring ‘Lifeline’ Of Connectivity to People Experiencing Homelessness in Great Britain
Strategy
26/08/2020Tesco Mobile Partners with Crisis to Bring ‘Lifeline’ Of Connectivity to People Experiencing Homelessness in Great Britain

Tesco Mobile has announced the start of an ambitious two-year partnership with Crisis with the aim of helping thousands of people experiencing homelessness across Britain to reconnect with society.

Read Full PostRead - Eye Icon
BlueSnap Raises  $50 Million  for Its Global Payment Processing Tech
Innovation
08/04/2015BlueSnap Raises $50 Million for Its Global Payment Processing Tech

BlueSnap is a smarter global payment gateway powering the checkout process for eCommerce merchants worldwide, and fuelling growth for online businesses serving digital, physical and mobile markets.

Read Full PostRead - Eye Icon
A Leading Light in Law
Leadership
23/07/2019A Leading Light in Law

Ramni Taneja is an Indian Advocate, a sole practitioner, a litigator and also a transactional lawyer. Throughout her career, Ramni has accumulated experience, accolades and a wealth of loyal clients.

Read Full PostRead - Eye Icon
Creating Innovative Technologies in the Cardiovascular Space
Leadership
16/01/2018Creating Innovative Technologies in the Cardiovascular Space

FineHeart is a French medical device company focused on creating innovative technologies in the cardiovascular space.

Read Full PostRead - Eye Icon
CEO of the Year – Belgium
Innovation
06/05/2016CEO of the Year – Belgium

Kollector has developed an information system which provides real time statistics about radio broadcasting and online distribution, worldwide.



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow